Wednesday, November 02, 2011

I was reminded of this great quotation by the appearance of supporters of the “Robin Hood Tax” on the news again today. According to Russia Today, Occupy Wall Street protesters want this tax to be implemented. According to Channel Four News, G20 protesters want the same. And according to the BBC, the Archbishop of Canterbury is also promoting this tax, along with the Pope himself. We might imagine, therefore, a motley gang of real and imagined radicals, priests and police spies (maybe!) gathered to invoke rather than exorcise something most people don’t have the slightest interest in.

The “Robin Hood Tax” is, in my opinion, an extremely bad idea. Could one contrive a better system to effect the following:

1. Incentivise people to trade options on shares, untaxed, rather than shares, taxed

2. Dissociate the number of share options from the number of shares: effectively monetise equity shares

3. Establish economies of scale in the trading of options by large financial institutions, because … if you imagine options sold by an institution are backed to an extent by shares held by the institution, a larger broker can make share purchases based on option sales to a greater extent internally, untaxed

4. Establish a system where equity is legally owned by a few large financial institutions, who then sell options to buy the same equity, which are traded in place of equity shares

5. Concentrate control of the economy in the hands of large financial institutions – JP Morgan, Goldman Sachs

This is absolutely not a grass roots initiative. Anarchists are not interested in the tax system. No-one is interested in establishing payroll imputation against output VAT, which is eminently sensible. The government piss away far too much money as it is. It’s like, they expect people to support this because it’s named after Robin Hood and so maybe seems anti-establishment. Anyone convinced by that line of reasoning should perhaps reappraise the proposals, imagining they went under the banner of King Herod, or Skeletor, or some other figure who more closely resembles our intellectual entrepreneurs.